The company announced its 2024 interim report. In the first half of the year, it achieved operating income of 150.417 billion yuan, +0.06% year over year; realized net profit to mother of 15.084 billion yuan, +46.42% year over year; realized net profit of 15.433 billion yuan after deduction of non-return to mother, +59.84% year over year.

The volume and price of the main metals have risen sharply, boosting the company's net profit. Looking at a single quarter, the company achieved revenue of 75.64 billion yuan in Q2, +0.33% year over month; realized net profit of 8.824 billion yuan, +81.54% year on year, +40.93% month on month; realized net profit without return to mother 9.209 billion yuan, +114.85% year on year and +47.96% month on month. In terms of profitability, the company's gross margin for the first half of 2024 was 19.15%, up 4.5 percentage points year on year; net margin was 12.28%, up 3.74 percentage points year on year. In the first half of 2024, the volume and price of the company's main metals rose sharply, and production was sold out. At the same time, the cost of some mineral products was reduced by controlling costs and increasing efficiency. During this period, the company achieved 0.519 million tons of mineral copper, 35.4 tons of mineral gold, 0.222 million tons of mineral zinc (lead), and 210.3 tons of mineral silver. Among them, mineral copper and gold grew 5.3% and 9.5% year-on-year respectively. The overall gross margin of mineral products increased 5.6 percentage points year-on-year to 57.3%, boosting the company's performance to a new high.

Major breakthroughs have been made in the new round of prospecting, and the company's resource reserves have continued to increase. In the first half of the year, the company achieved significant results in prospecting. The company's Tibet Julong Copper Mine and Heilongjiang Tongshan Copper Mine added a total of 18.377 million tons of registered copper resources and 5.777 million tons of newly registered copper metal reserves, accounting for 14.2% of China's copper reserves at the end of 2022. In addition, the southern MG exploration of the Peji copper-gold mine in Serbia is expected to uncover new large-scale high-grade copper-gold deposits. Exploration of the Buritika gold mine, northeastern Manono lithium mine, Norton gold field, Shanxi Zijin, Xiangyuan lithium mine, and preparations for iron ore have all made positive progress. In the first half of the year, the company's equity resources increased by 6.197 million tons of copper, 53.71 tons of gold, and 3,334 tons of silver compared to the beginning of the year.

The increase in its own mineral resources not only reduces production costs for the company's smelting and deep-processing products, but also lays a solid foundation for performance growth.

Gold and copper prices are expected to remain high to ensure steady growth in the company's performance. On the copper side, the copper supply side continues to tighten, while downstream copper consumption is expected to grow steadily, driven by energy structure transformation and the development of electric vehicles, and copper prices are expected to rise again. On the gold side, as the Federal Reserve's monetary policy is about to take a turn, compounded by the geographical situation and a certain risk aversion brought about by the political election, it is expected that the price of gold may continue to fluctuate at a high level.

The company's main profit comes from mining copper and mining gold production business. In the first half of the year, the company produced 518,570 tons of copper, an increase of 5.3% over the previous year, and the mine produced 35,406 kg of gold, an increase of 9.5% over the previous year. During this period, the company's Camoa Copper Mine Phase III plant was completed and put into operation half a year ahead of schedule. After delivery, the annual copper production will increase to more than 0.6 million tons, making it the largest copper mine in Africa and the third largest copper mine in the world; the 2.4 million tons/year gold mining and 5 tons/year gold smelting project of the Sabayalton gold mine were completed and put into operation as scheduled. The company's major mineral projects are progressing in an orderly manner, and against the backdrop that gold and copper prices are expected to remain high, the company's performance growth is guaranteed.

Investment advice: The company's copper and gold sector continues to expand, and rich resource reserves and diversified mineral portfolios lay the foundation for accelerated performance growth. The company's earnings per share for 2024-2025 are expected to be 1.20 yuan and 1.43 yuan, respectively. PE corresponding to the closing price on August 28 is 13.24 and 11.10 times, respectively, maintaining the company's purchase rating.

Risk warning: macroeconomic fluctuation risk; environmental protection and production safety risk; raw material price fluctuation risk; industry competition risk; risk of downstream demand falling short of expectations; foreign trade export risk.